The Month-End Close Checklist for Finance Teams in Nigeria

Month-end close is a critical process for finance teams, ensuring the accuracy and timeliness of financial reporting. This article outlines a comprehensive checklist designed to guide finance teams in Nigeria through an efficient month-end close process.

1. Pre-Close Activities

• Review Previous Month's Close: Evaluate the previous month’s closing process to identify and address any issues or inefficiencies.
• Update the Closing Calendar: Ensure the closing calendar is updated with key dates and tasks, considering any changes in regulatory deadlines or business operations.
• Communicate with Stakeholders: Inform all stakeholders of their responsibilities and deadlines to ensure smooth coordination.

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2. Reconciliations

• Bank Reconciliations: Reconcile bank statements with the general ledger (GL) to ensure all transactions are accurately recorded.
• Accounts Receivable and Payable Reconciliations: Confirm that all invoices and payments are accurately accounted for and reflected in the GL.
• Inventory Reconciliations: Verify physical inventory counts against inventory records, adjusting for any discrepancies.

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3. Adjustments and Accruals

• Review and Post Adjusting Entries: Identify and post any necessary adjusting entries for expenses, revenues, and intercompany transactions.
• Accruals: Ensure all accrued expenses and revenues are accurately recorded, reflecting the economic activity of the period.

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4. Financial Statement Preparation

• Trial Balance Review: Review the trial balance for accuracy, investigating any unusual balances or discrepancies.
• Draft Financial Statements: Prepare draft versions of the income statement, balance sheet, and cash flow statement, ensuring they reflect all known transactions and adjustments.
• Financial Analysis: Conduct variance analysis comparing current period results to both the prior period and budget, explaining significant deviations.

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5. Review and Approval

• Internal Review: Conduct a thorough review of financial statements and supporting documentation to ensure accuracy and completeness.
• Management Review: Present financial statements and analyses to management for review, discussion, and approval.

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6. Reporting and Compliance

• Statutory Reporting: Prepare and submit any required statutory reports to Nigerian regulatory bodies such as the Federal Inland Revenue Service (FIRS) and the Corporate Affairs Commission (CAC).
• Tax Compliance: Ensure all tax liabilities are accurately calculated and timely paid, including VAT, PAYE, and corporate taxes.
• External Reporting: Distribute final financial statements and reports to external stakeholders, including investors, lenders, and other interested parties.

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7. Continuous Improvement

• Post-Close Meeting: Hold a meeting with the finance team and other stakeholders to discuss the close process, highlighting successes and areas for improvement.
• Update Documentation: Revise policies, procedures, and checklists based on feedback and changes in the regulatory environment or business operations

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Integrating Flex Finance for Simplified Month-End Close

Integrating a spend management platform like Flex Finance can significantly streamline the month-end close process for finance teams in Nigeria. Flex Finance offers a comprehensive solution that simplifies financial management, enhances visibility, and automates many of the tasks involved in the month-end close. Here's how Flex Finance can make the month-end close process easier and more efficient:

1. Automated Reconciliations

• Flex Finance automatically reconciles bank transactions with the general ledger, reducing the time and effort required for manual bank reconciliations.
• The platform also simplifies reconciliations for accounts receivable and payable, ensuring that all invoices and payments are accurately matched and recorded.

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2. Real-Time Expense Tracking

• The platform provides real-time visibility into expenses, enabling finance teams to monitor and control spending throughout the month.
• This proactive approach reduces the need for extensive adjustments and accruals at month-end, as expenses are accurately tracked and recorded as they occur.

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3. Streamlined Accruals and Adjustments

• Flex Finance automates the recording of accruals based on predefined rules, ensuring that all accrued expenses and revenues are accurately captured.
• The platform also facilitates the easy identification and posting of adjusting entries, reducing the risk of errors and omissions.

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4. Enhanced Financial Reporting

• Flex Finance offers customizable financial reporting templates, allowing finance teams to quickly generate accurate and comprehensive financial statements.
• The platform's analytics tools enable in-depth financial analysis, providing insights into variances and trends that inform decision-making.

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5. Improved Compliance and Reporting

• The platform supports compliance with Nigerian regulatory requirements by ensuring accurate tax calculations and facilitating timely statutory reporting.
• Flex Finance also streamlines external reporting by providing easily accessible and exportable financial statements and reports.

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6. Collaboration and Workflow Management

• Flex Finance enhances collaboration among finance team members and stakeholders through its workflow management features.
• Tasks, approvals, and reviews can be managed within the platform, ensuring a coordinated and efficient month-end close process.

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7. Continuous Improvement

• The platform's data analytics capabilities provide valuable insights into the month-end close process, helping finance teams identify areas for improvement.
• Flex Finance's scalable and adaptable solution evolves with the business, supporting ongoing enhancements to the month-end close procedure.

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Conclusion

Incorporating a spend management platform like Flex Finance into the month-end close process can significantly ease the burden on finance teams in Nigeria. By automating key tasks, enhancing visibility, and streamlining reporting, Flex Finance allows finance teams to focus on strategic analysis and decision-making. The result is a more efficient, accurate, and stress-free month-end close process that supports the overall financial health and success of the business.

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